Cabinet approves Rs 1,250 Cr USOF support to BSNL

The union cabinet chaired by the prime minister Narendra Modi, has approved the proposal to extend subsidy support of Rs 1,250 crore to BSNL from Universal Service Obligation Fund (USOF).

The fund has been approved as compensation for deficit incurred by Bharat Sanchar Nigam Limited in operating rural wireline connections installed prior to 1st April, 2002. The eligible rural wireline connections installed prior to 1.4.2002 is 32.32 lakh, across India as on 31st March 2014.

The cabinet also approved that the above subsidy support would be the last and final payment and no further request from BSNL for financial/subsidy support from USOF on this count shall be considered.

In order to make BSNL eligible for subsidy funding on nomination basis from USOF, amendment will be required in Rule 526 of the Indian Telegraph Rules (ITRs), 1951. It stipulates that the criteria for selection of universal service providers shall be made by bidding process from amongst eligible entities for implementation of USOF schemes. Corresponding amendment in Rule 525 will also be required.

The government will disburse full/lump-sum amount of Rs 1,250 crore consequent to necessary amendment of the ITRs and signing of USOF agreement with BSNL.

BSNL need to submit utilization certificate of the USOF subsidy disbursed towards operation and maintenance of the rural wireline connections would be submitted by BSNL.